More than 120 thousand sole proprietorships closed in Ukraine in 2024, one third in the first year of operation
2 September 2024 15:55
Despite the overall growth in the number of newly established sole proprietorships in Ukraine, more than a third of them close in the first year of operation. This is stated in a study by Opendatabot, according to "Komersant Ukrainian"
According to the Unified State Register, since the beginning of 2024, almost 194,000 new individual entrepreneurs have been registered in Ukraine – even more than before the start of the full-scale war. More than 60% of these businesses were started by women, which is a record high.
Most new cases were registered in Kyiv (13.6% of the total), Dnipropetrovska (9.3%), Lviv (7.5%) and Kharkiv (6.7%) regions. At the same time, business activity increased significantly in Zaporizhzhia, Kirovohrad and Chernihiv regions, while it decreased in the frontline Luhansk and Ivano-Frankivsk regions.
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Opendatabot analysts note that trade (27.5%), IT (7.6%), and individual services (7%) are in the highest demand among newly minted entrepreneurs.
At the same time, more than 120,000 sole proprietorships were closed during the first 8 months of 2024, and these are mostly newly established businesses: 24.5% of them were opened last year, and 13.7% this year. The average age of sole proprietorships closed this year is 2 years and 7 months.
The simplified taxation system for individual entrepreneurs has existed in one form or another since 1999, but it has gained particular popularity in the last decade as it has become easier to use. This popularity has even led to criticism of the mechanism. It is believed that it does not really help bring businesses out of the shadows, as, on the contrary, large businesses use sole proprietorships to avoid paying large taxes.
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